Hepatocyte growth factor (HGF) can stimulate human and rat bone marrow (BM) cells to differentiate into hepatocytes. A human placental hydrolysate (hPH) stimulates proliferation of hepatocytes, but its role as a potential inducer of BM cells to form hepatocytes is unclear. To determine if canine BM cells stimulated with HGF or hPH differentiate into hepatocyte-like cells, BM cells were cultured with HGF or hPH. The cultured cells underwent morphological examination, expression of albumin and cytokeratin 18 (CK18), hepatic function tests including uptake of low-density lipoprotein (LDL) and cytochrome P (CYP) 450 activity. Albumin mRNA and protein expression of albumin and CK18 proteins were detected in cultures with HGF and hPH. Furthermore, these cells demonstrated LDL uptake and CYP450 activity. These results indicate that canine BM cells can differentiate into hepatocyte-like cells when stimulated by both HGF and that hPH may be an effective inducer of hepatic differentiation.